Spruce Power (US:SPRU)2022-11-09 22:15Financial Performance - Total revenues for the three months ended September 30, 2022, were $8.36 million, a 161.25% increase from $3.2 million in the same period of 2021[18]. - Operating expenses for the three months ended September 30, 2022, were $36.37 million, up 96.73% from $18.47 million in the same period of 2021[18]. - Net loss attributable to XL Fleet for the three months ended September 30, 2022, was $22.01 million, compared to a net loss of $7.53 million in the same period of 2021[18]. - For the nine months ended September 30, 2022, XL Fleet Corp. reported a net loss of $50,361,000 compared to a net income of $43,914,000 for the same period in 2021[22]. - The company reported a loss from operations of $28.01 million for the three months ended September 30, 2022, compared to a loss of $15.27 million in the same period of 2021[18]. - The net loss for the three months ended September 30, 2022, was $(6,663,000), compared to a net loss of $(83,000) in the same period of 2021[106]. Cash and Liquidity - Cash and cash equivalents as of September 30, 2022, were $239.51 million, down from $351.68 million as of December 31, 2021[16]. - Cash and cash equivalents and restricted cash decreased to $271,634,000 at the end of September 2022 from $366,898,000 at the end of September 2021[23]. - The company experienced a net cash used in operating activities of $46,396,000 for the nine months ended September 30, 2022, an increase from $34,215,000 in the prior year[22]. - The company had cash paid for interest of $22,000 for the nine months ended September 30, 2022, down from $35,000 in the previous year[23]. - The company’s cash and cash equivalents at the beginning of the period were $351,826,000, compared to $329,791,000 at the beginning of the same period in 2021[23]. Assets and Liabilities - Total assets increased to $917.63 million as of September 30, 2022, from $393.22 million as of December 31, 2021[16]. - Total liabilities rose to $552.54 million as of September 30, 2022, compared to $31.41 million as of December 31, 2021[16]. - The accumulated deficit increased to $150.19 million as of September 30, 2022, from $99.41 million as of December 31, 2021[17]. - The company’s total stockholders' equity decreased to $326.19 million as of September 30, 2022, from $361.81 million as of December 31, 2021[17]. Segment Performance - Revenue is generated from three segments: Drivetrain, XL Grid, and Residential Solar, with the Drivetrain segment focusing on hybrid electric powertrain systems sales[61]. - The Drivetrain segment generated revenues of $858,000 for the three months ended September 30, 2022, compared to $555,000 in the same period of 2021, an increase of 54.67%[205]. - The XL Grid segment reported revenues of $2,422,000 for the three months ended September 30, 2022, down from $2,645,000 in 2021, a decrease of 8.43%[205]. - The Residential Solar segment generated $5,080,000 in revenues for the three months ended September 30, 2022, with no revenues reported in the same period of 2021[205]. Acquisitions and Investments - The company acquired 100% of Spruce Power on September 9, 2022, which generates revenue through long-term agreements for residential solar energy systems[27]. - The Company acquired Spruce Power for $32,585, consisting of cash payments of $61,788 less cash and restricted cash acquired of $29,203[101]. - The total purchase consideration for the Spruce Power acquisition was $32,585,000, with goodwill amounting to $158,636,000[103]. - The company incurred transaction expenses of $15,020,000 related to the acquisition of Spruce Power for the three and nine months ended September 30, 2022[108]. Operating Expenses - The company incurred severance charges totaling $840 in connection with the workforce reduction, with $725 paid in the first quarter of 2022[174]. - The company recognized a total charge of $2,358 related to restructuring activities in the first quarter of 2022, which included the closure of its production center and a workforce reduction of 51 employees[173]. - Engineering, research, and development expenses are expensed as incurred, including costs for salaries, benefits, and contracted services[93]. Debt and Financing - The company assumed long-term debt of $510,002,000 in connection with the acquisition of Spruce Power, with a fair value adjustment reducing the carrying value by $32,467,000[119]. - As of September 30, 2022, the total principal payments on long-term debt amount to $542,493,000, with a net long-term debt of $485,030,000 after accounting for the current portion[121]. - The interest rate on the A&R SVB Credit Agreement as of September 30, 2022, was 5.19%, while the Second SVB Credit Agreement had an interest rate of 5.11%[123][130]. - The KeyBank Credit Agreement, which amounts to $74,810,000, has an interest rate of 5.81% as of September 30, 2022[135]. Legal and Regulatory Matters - The company is involved in ongoing legal proceedings, including a shareholder derivative complaint alleging breaches of fiduciary duty, but believes the claims are without merit[185]. Stock and Equity - Share-based compensation expense for the three months ended September 30, 2022, was $2,651,000, compared to $1,194,000 for the same period in 2021[157]. - The aggregate intrinsic value of stock options outstanding as of September 30, 2022, was $3,505,000, with $534,000 received from options exercised during the nine months ended September 30, 2022[159]. - The company granted 10,732,372 restricted stock units during the nine months ended September 30, 2022, with a weighted average grant date fair value of $1.31 per share[161]. Restructuring and Strategic Initiatives - In Q1 2022, the Company initiated a strategic review leading to the elimination of a substantial majority of its hybrid drivetrain products and PHEV products, resulting in a workforce reduction of approximately 50 employees[211]. - The Company announced its decision to pursue transformational M&A, supported by a significant cash balance from its go-public transaction in December 2020, focusing on decarbonization and energy transition opportunities[212]. - The company restructured into three operating segments: Drivetrain, XL Grid, and Residential Solar, following the acquisition of Spruce Power in Q3 2022[202].